Underpaid tax and unemployment

ktothema

Hi,

I've probably posted this in completely the wrong place, so if anyone with the power wishes to move this - please do!

I believe I have underpaid income tax this year. I always knew this was a possibility as my company had admitted they were using the wrong tax calculation for all employees this year. 4weekly payment, and odd calendar and a leap year has meant an extra pay packet. Well, an extra pay packet if you weren't made redundant, which I was. I'm not sad about this! :j

However, I still think my tax has been underpaid. From what I can tell, as this amount is very low it is likely to be clawed back through my tax code.

I'm now pregnant again, and looking unlikely to cease being unemployed for any period before this the way things are currently going. My question is, if I don't work again for a few years will they keep rolling the underpayment year after year until I am employed again, or at some point will they come after me for it?

I'm happy to pay it of course as its owed. I've been advised by a solicitor over my redundancy to not contact the tax office of course too...:rotfl:

Thanks

dawyldthing

type the amount you have earned this year into www.listentotaxman.com and it will show what tax and ni you should have paid this tax year. I believe they could possibly take it out of any tax credit if you have underpaid possibly, not totally sure tho

Evilm

They will probably send you a recalculation letter and a request for payment around June-July time.

You could put your total pay for the year into http://listentotaxman.com/ and then add up your tax on the payslips and see what the difference is.

Then you can at least put that sum aside mentally/into a savings account in case they do ask you to repay it.

sammyroser

I had a helpful letter in December about 2 weeks after losing my job.

I had underpaid around £112. They would not recalculate my tax code due to 'time issues' he kept repeating.

So they said they would take the money in either 12, 24 or 36 payments (one a month)

Must admit after being on hold for 40min I was in a slightly awkward mood so I said 36 months. That is just over £3 a month lol! Interest free I'd like to add.

So in other words they will send you a letter asking you to pay, you can either send them a check or call them to arrange monthly payments!

ktothema

Thanks for the responses.

Checking that site is what makes me believe I underpaid. My company promised that if I earned £35k is only underpay by £135 (less if you earn less, more if you earn more). I've earned less than half this but appear to have underpaid about £180. Thanks payroll, nice to know you can all add up :laugh:

I shall await the tax mans letter, but also store that money away. I'd just rather pay it sooner than later at least then I know what I have to live on for a while. Hard to arrange when trying to avoid the tax man!

chrisbur

It can sometimes be misleading checking your tax on most tax checking sites. Was the figure you checked your total taxable income and total tax paid for the full year, if it was not you will get the wrong answer. You say you were made redundant, this suggests that perhaps it was not the end of year figures.
If you want to know your tax position post the figures on here to be checked. From your last payslip or P45 give the taxable gross tax paid tax code and week number.

ktothema

Hi Chrisbur,

Yes, I have checked my total taxable income and tax paid for this financial year, assuming I won't earn again this financial year. I have done this based on my last payslip, which is the final pay check I will ever receive from them. Unfortunately despite making me wait until my last pay check before giving me my p45 (which makes sense) they've filled my p45 out for two pay checks previous, so it isn't reliable and I am now thankful that I'm unlikely to find employment by the end of this tax year. Thankfully the personal info including NI number and tax code are correct on it...

chrisbur

ktothema wrote: »

Hi Chrisbur,

Yes, I have checked my total taxable income and tax paid for this financial year, assuming I won't earn again this financial year. I have done this based on my last payslip, which is the final pay check I will ever receive from them. Unfortunately despite making me wait until my last pay check before giving me my p45 (which makes sense) they've filled my p45 out for two pay checks previous, so it isn't reliable and I am now thankful that I'm unlikely to find employment by the end of this tax year. Thankfully the personal info including NI number and tax code are correct on it...

Do you mean that you have taken your last payslip and assumed that you will have no more earnings this year so have checked these figures on listen to taxman for the full year, and this has given you a tax due figure higher than the one on your payslip? If this is the case then it does look like you have underpaid tax.

ktothema

Yes, that's what I mean and is why I believe I have underpaid tax. My concern is what happens if they decide to roll it into my tax code but I the dont earn for a few years (due to having another child, so I'm intending to take a career break after this one is born). I'm hoping I'll get a letter like sammyroser to sort it.